Q2 2021 Millicom International Cellular SA Earnings Call
Home Cable business, is growing its customer base. Indeed, at an amazing speed. We now have 4 million home customers. That's 15%, more customers. And we did 1 year ago, this is largely coming from accusing penetration on our Network. Now, 33 percent which is helping return on Capital and cash coefficients. We also continue to expand our Network as we see ample room for growth going forward, we added another hundred and sixty thousand homes passed into YouTube.
And about half million. In the past year, we're adding all these customers, while also preserving our home business, not only has a rapid growth profile, but it now has a scale as well, somebody was only 5 years ago. It is not 1.6 billion dollar business for us. And as you can see, from the first half results, we are turning that into a run rate of about 1.7 billion for this year.
And you also know that we are far from done. We will continue to both reach more homes. I'm to drive in tuition rates higher. The pandemic has taught everyone that Broadband is a necessity for every household. Now, let's take a look at our postpaid business which also performed extremely well in Q2. As you can see on, slide 9.
As you saw earlier postpaid was hard, hit in the early days of the pandemic, customers began, migrating from postpaid plans to prepay, and we Face temporary challenges in collecting on pay bills, and we ended up disconnecting around 450,000, postpaid, customers in Q2 of last year. And we stood, our customers would live and products. And we continue to strongly invest in our Network to improve customer experience. And now we have seen the strongest recovery postpaid that we kind of hopeful
Shoot 2 in particular, was 1 of our strongest borders ever in terms of postpaid, net out. This was driven mostly by exceptionally strong performance in Colombia.
We now have more posted customers, and we did before cubby, and we have strong momentum to continue growing. Let's look briefly. Now, the quarter on a country-by-country basis on slide..10 team will talk about some of these later but this slide speaks for itself. The main message is that every single 1 of our markets crude is quarter, and most of them do double. Digits is Salvador, had another amazing quarter driven by Strong mobile results, and it grew 21%, Bolivia performed. Well in all business lines,
Working male continues to thrive while I'm Panama. We continue to execute on an integration Playbook which is driving very strong growth in the customer base.
Let's do a deeper dive into the results in Colombia and our newer markets of Panama and Nicaragua on the next 3 slides starting with Colombia on slide 11. I am sure there were expectations for our performers in Colombia this quarter. The short answer is that we're very pleased to report that 1 we added a record number of postpaid customers 120,000 in the quarter. Our postpaid, customer base is now up 26 percent year on year in Colombia.
2.
We were the biggest winner on portability in the market.
3 that we now have the best mobile network in Colombia without an inch of Doubt. According to both to tell her I'm to opensignal and as you know, this is typically the most important attribute of postpaid. Customers in Colombia, we bought the Spectrum, we build. The networks will increase their commercial distributions and a customer service capabilities and this. What you're saying on this chart are the results and our home business. Also continue to grow in Colombia and Q2 with 32,000 nunataks,
This impressive results in Colombia comes, despite the large public demonstrations that affect the country during the YouTube. This disturbance is indeed had a negative impact on our commercial activity particularly prepaid. And yet we were still able to continue to grow very strongly as you see on this page. Now let's look at Panama was like 12
as you know, we bought comely onda in December of 2018 and then we bought our mobile acid, 8 months later in August of 2019, from telefonica we have seen successfully integrate, the business has proceeded to modernize and expand our mobile network, improve our fixed Network and successfully introduced at Eagle brand are earlier this year. All, despite all, and in the middle of the pandemic and with a recessionary warm,
As you know, Panama's you to be contracted 18% of last year, the results of our strategy are clear on the top part of this night. We have grown our customer base in both mobile and fixed especially during the pandemic. And we're now seeing very rapid Revenue growth in our consumer business. We expect a bit of people. Follow 1 GDP growth comes back setting, a simpler manner with position ourselves extremely well, but when the Panamanian economy kicks back into high gear and we expect that he will do.
Ooh, just that sooner rather than later, finally, let's look at the other mobile acquisition. Success story, Nicaragua we acquired the mobile business in Nicaragua in May of 2019. Giving us a leadership position in a two-player mobile market. And 1 where we had a very small text business with very big growth potential and a tremendous cross-selling opportunity. Similar to a playbook in Panama, we entered Nicaragua with the expectation that we would investigate the mobile network to add capacity and bring it up..2.
Data standards and that investment is paying off. Our Mobile customer base in Nicaragua is at 11% since the acquisition. And we have continued to make important inroads with our home business, which is growing very rapidly. Now supported by a larger brand presence and the ability to cross sell to a mobile user base. The key message is that even with all the challenges countries, facing we remain focused on executing, our integration plan. And we're seeing the senior these do come true Revenue. Nicaragua is not growing double digits.
Multimedia is up, 20% your near and have almost 10% in dollars from where it was when we bought the business 2 years ago. Let me turn it over to Tim to go over the financials for the quarter. Thank you Marcia. So let me get straight into the financials turning to slide 15.
Roman slave, 15, you can
Our usual Bridge from the IFRS reported numbers to the last time segment on was of 1.4 billion and service revenue and 620 million dollars in ebj. We're discussing on this call you let me start on slide 16 with the macro backdrop.
We have seen economic activity gradually recovering in most markets in Central America, there's been record levels of remittances and economists are forecasting. GDP growth of 3 to 5 percent from most countries. Inflation is climbing somewhat but it's still at manageable levels.
FX rates have been generally stable and indeed we have seen almost a 1 percent Revenue growth coming from FX Tailwinds.
Vaccination rates are below 25% in most of our markets and COVID-19 is certainly not disappear from Latin America indeed on many counts. It may now be 1 of the most affected regions in the world. That said, we do not see a return to the more severe levels of Mobility restrictions that were in place this time last year
and ratio is covered. Most of the factors behind the double digit lat, am Revenue growth. So I'll move to the next slide which shows the revenue growth by operation 1 slide 17. You can see that all but 2 of the operations posted double-digit service Revenue growth in the second quarter and we'll ask you to 2020 was a low bar. We are also comfortably ahead of our, 2019 numbers demonstrating, the strategy is effective. El Salvador is
Strolling ahead driven by mobile, which is benefiting from spectrum and network Investments by the Marla is again search with another impressive performance up 12.2 percent year-on-year. And remember that Guatemala was 1 of our less impacted countries by COVID-19 restrictions this time. Last year, finally, I want to pick up on Paraguay, where a one-off adjustment reduce weapon? Is neither da by 4 million dollars. Excluding, this 1 off Revenue growth would have been
N4 point 3 percent.
The next slide..18 DB G A grew by 14 percent year-on-year or 76 million dollars driven by revenues.
We've already talked about the substantial pickup in amongst other things postpaid subscribers. But you can see here on this chart that the impact was felt in much, higher sales and marketing department, move normally expect to see we believe this investment is well worth making, especially in Colombia.
I'm moving on to slide 90.
Hey, Benji. A gross was double digits in almost all countries. And then, El Salvador, Bolivia up around 50%. Now, this largely is because we took High bed that charges in those 2 countries last year. Whereas today, we're back to more normal levels. You'll notice have been Columbia. We did not grow. I think maurcio has explained this pretty fully, but the margin contraction largely stems from significantly. Higher customer acquisition cost that I've just mentioned and I think on that point
Ant and despite this higher investment, it's also worth mentioning that the overall lat am. Even J. Margin was hiring Q2.2021 than this time last year and it stands at over 40%.
Turning to cash flow. I want to spend a few minutes on capex and slide 20.
Now this time last year in the eye of the pandemic, we stand for Don, the discretionary spending including capital expenditure in order to preserve cash flow.
In fact, as a business showed resilience, we started to ease back into capex fandoms, third and fourth quarter ending the year at just under a billion dollars. Invested, we invested in network upgrades and bringing quality customers on to the network and that is paid off.
We told you that coming into 2021, we were accelerating the investment and on this slide you can see some of the things we have been investing in. We've taken on about 10 times the number of customer additions, in home than we did in the first half Last year me to be installations of increased by 13%. And so on, this is all had an impact in higher Catholics, but we are expecting to spend a further 100 to 200 million dollars on capex.
In 2021 compared to last year and this is funded out of hi. Reba with you.
Let me now turn to the implications for cash flow on slide 21.
On slide 21. You see the operating Cash Flow Bridge. Remember, we Define operating cash flow as either da less capital expenditure. And the first thing to say is that we are on track to hit our 1.4 billion dollar Target for 2021.
Now we have only invested around 400 million dollars in capex in the first half, but our capex is always back and waited and I expect that to be the case this year. So based on higher capex in 2021 and the on the ebitdaal a run rate that we expect we are comfortable in confirming that we're on track, to hit our ocf Target of at least 1 point 3 billion for this year.
2012 debt and leverage on slide 22.
Once again, we made very good progress towards our leverage targets net debt Reduce by 224 million dollars partially reflecting the sale of our remaining Helios Towers chips. Plus as we learnt the week, Q2.2020, with an increase in proportion of either da, our leverage has reduced by twenty 4 basis points from Q1 and 31 basis points from the start of the year, it now stands at 2.7 times.
This is remain stable in the quarter, taking our underlying net Financial Obligations to just over 6 point 3 billion dollars or 2 point..8, 9 times proportionately busy a
Finally, on slide 23 with strong subscriber, growth revenue, and ebitda Grove, our cash flow on traknet. That reducing and leverage below..3 times we have today, announced the resumption of our share buyback program.
So with that, let me pass it back to maurcio to wrapper.
Thanks Jim before we take your questions, let me recap the most important takeaways today. First we have invested in the business and in our networks throughout the pandemic, and this is clearly paying off. But increase, our customer base, and our market share in most countries and we're winning in Colombia. Second, our growth is accelerating and that's what we expect. Our capex, be higher in the second half because it is directly linked to our subscriber games in postpaid and in home and 2 more available network coverage and prepaid which
Internet yields more usage and revenue. Third of operating cash flow is on track to either pull your target or at least 1 point, 4 billion dollars and fourth. And finally, not of our strong operational and financial performance are confident that we can further continue to reduce leverage and fully continue to invest in the business and our favorite outlook for the remainder of the Year. We're assuming shareholder immigration with a share buyback program of about a hundred million dollars of team, just manage our growth. Now, gives us room to continue to invest in the business.
Tina to the lever rapidly and resume shoulder immunization. We also happen to think that our stock is, 1 of the best investments. We can make today, and without we're now, ready for your questions?
Thank you Mauricio. Thank you Tim. So will now begin the Q&A session if you'd like to ask a question please let us know by emailing us at investors at millicom.com and we will add you to the queue. When I announce your name, please unmute your line and make sure that your video camera is turned on and then please mute your line after you've asked the question. So our first question is coming from a settle Santos of JP Morgan. Must hello. Hi. Good morning. Thanks for taking my questions.
Have actually 2 questions. The first 1 is on Columbia, so we saw you had a very good result in terms of net ads on your new paid campaign. I would like to understand a little bit better output for margins with took a bit of a hit this quarter and as well as they are pool, which was a little bit softer. So that's the first question. The second question is unbelievers performance which although it decrease a lot on a year-over-year basis was 1 of the few countries that had quarterly
Irr decline, both in service revenues and a disaster. If you could comment a little bit more on, believe it would be very helpful. Thank you.
Sure, thank you Marcelo, good to see you and thanks for your questions on Columbia, generally speaking, where, as you can see, very, very least with our results in the market. It's been a quarter in which we've been able to show all that we can do with the new network and with increased concern, commercial distribution that we have. And you're seeing now the results in terms of this
Just strong strong. That adds we can talk a little more about Columbia later but specifically on your question on that out and the outlook for margins we like the new normal where we win in Colombia. We're happy to reinvest our continued customer and revenue growth into our margins because Columbia for now is a good strong game of volume and we are getting volume in Colombia. So we're very happy with the outcome that we have.
For increase position in Colombia on it.
You can talk about more strategically in a minute and and believe you you're right, it's 1 country where we are. Not yet back at the pre copied levels, but it's coming back very, very strongly. We envisioned that it will be back there. Very, very soon. In Bolivia as you know we went through a couple of years of political and the macro turmoil things are a lot more stable today than they are. We like the stability that we're seeing in Bolivia
Business continues to perform everyday much stronger than the day before despite competition on mobile. We see some stabilization really happening in a Marketplace and password. Very positive, that will be back to pre covered levels later on in the year and the home business in Bolivia is just like hitting in back in all gears, you know, a few years ago, we didn't have a home business in Bolivia. Now we have a very strong home or Cable business that we've built over the last 5 years.
Years and we continue to grow that Cable business with strong are blunt subscriber growth. And as a result of that, you know, where bullets are going to come back to Bolivia.
Later this year back to recover levels. Thank you very much.
okay, our next question will come from Stefan, garthen at the ND,
Define, you may still be on mute.
Now, that we are, can you hear me first? I would like to continue on on Columbia. We saw this with the network performance versus Pearce and, and you're still lagging on 1 of the key metrics coverage. Just give us an understanding where your
Versus South America movil in terms of 4G network coverage in Colombia. Secondly, the investment in in cable homes past but accelerated again, this quarter of the being a bit slow during the pandemic, how should we expect that going forward? Are you or you're trying to come back to to hire?
Coverage on all of the, the cable network. And then desperately on El Salvador, reporting 20.5% service, Revenue growth which is exceptional. Can you just what explains this development and what should we expect? They're going forward. Thank you. All right, thank you Stephen and those are always excellent questions. Let me let me be hard to take Columbia little bit more holistically because I know we're going to get a lot of questions on.
I think it's better just to go at it.
In a more holistic manner than just the specific bits and pieces. So let me go out at both operationally financially and strategically and hopefully that will give, you know, everybody or complete picture of what's going on in Colombia. Let me start with the short term, our quarter results. We view as outstanding. We as I said earlier to themselves question, we like in this quarter to have been the player in Colombia with
The most net ads on postpaid of the entire ecosystem there and you can go and look at the portability numbers in Colombia yourselves to the public and you'll see that where the net winner. So, we actually love the Columbia results. This quarter is what we expected. We would be doing today. And remember, we're talking about this net gains in the context of a new entrant in the market. So they are nothing short of with a very, very strong. Now, what's going on? Operationally first in Columbia,
On mobile, we had record postpaid, net adds into to, we've never had this kind of recognized in Colombia and that's happening because we're number 1, in portability, as I said. Now, the reason for this is you very well point out and I'll address your questions to find directly just because we now have the best network in Columbia and we're marketing it as such. And this is according to you know various number of sources and also on the back of it, providing the best quality of service.
And as you know, we've doubled the size of our commercial distribution Network for postpaid. So no surprise that. We're getting the results that we're getting. Now that 1 area in the network that we're missing coverage. You should not be at all focused on that because Columbia is a huge, huge, huge market. And I urge you to look at a map which shows that my Sony and there would be no key, right? So specific Geographic coverage of Columbia is not something that we
Team to win on because we already cover 99% of the urban population and where it matters. As a matter of fact, we're getting additional Revenue because we're getting additional coverage. The coverage that matters we already have and the coverage that matters indoor we got as a result of the 700 megahertz on the fastness with which we have built the network will continue to gain a little bit in coverage next year but it is not the 1 area that consumers Focus about we win.
In all the other relevant categories by far. Now our home business just to continue holistically. What's going on in Colombia, continues to grow very very strong 30. Mm, that's this water, which is pretty darn good and if you do the math or home revenue is growing double digits in Colombia with much better. Penetration, 32.33 percent almost in Colombia and that goes to the point. I think on your second question I'm going to
Said, with Columbia is revived.
Cable growth, you saw that if you go back a year or so we built about half a million homes, we will continue to build homes at a rapid clip. You know, we have a target of reaching about 60 million homes which we don't really call a Target. We call the Horizon because obviously it can continue to grow after that, as the social economics in the region improve, there's been 1 key development in Colombia which is that we can now get to build homes in Colombia.
Build homes in Colombia, using the open fighter that other providers are putting into the marketplace. We view that as positive, there are now today to open fiber providers in Columbia and that will help us get to those Horizon levels in a much faster way. But also in a less Capital intensive way giving us access particularly 1 of them to the boat a market where we have had very little access so far. So Columbia operationally we think is
Where we want it to be. Not financially. You've seen the numbers Revenue growth is 9 and a half percent top in the pack for sure. And we're happy, as I said to reinvest that margin because when you look at Columbia and I want to be super clear with it with everybody here, should teach equally the name of the game is for us to gain volume at this point in time. So don't be surprised at the margins are depressed. They need to be depressed because we're gaining.
Chair in Colombia. Now to look at the big picture strategically in Colombia.
We now have a state-of-the-art nationwide Network mobile. We have both high and low frequencies. It is an empty net work for us in Colombia when we only have 15 to 20 percent market share. So we stand to gain significantly. And as I've said before, we now have access to Bogota on mobile because we have the low frequency bands. When you look at home, we now have a network in Colombia, which is about 5 and a half million homes with hfc.
But now, we will have access to more with that, because 1 of the 2 key open, fiber providers will give access to Bogota and that we stand to gain by having access to Bogota. So, when you look at this, but we're talking, which is forty percent of the GDP in Colombia is a market where we had historically had little access on both mobile and fixed. I'm going forward, we're going to have better access both on mobile with our new network that penetrates endure and allows us to have access to that market. And also
So on fixed because we're going to finally be able to sell through this open fiber provider in Colombia, to the Bogota market. So, when you couple this things on our state-of-the-art networks, we're pretty bullish on our ability, to strategically to be better position today than we have ever been in Colombia and the ability to dried FMC in Colombia because we are both fixed and mobile networks. So, when you put all that together or you know, we don't only just like the Cuban sols. We like the outlook for Columbia ourselves.
That was a, huh?
Well done Columbia but hopefully that kind of gives everybody the big picture in Columbia and also answers your questions and I'll sometimes Stephen and in El Salvador, I think you need to unmute.
Let's take point on this that yes, you know the margins were lower in Colombia but the group margins will hire you know and and that's the way we manage the portfolio. You know we took a view that we wanted to invest in Colombia. We have we're mindful of the margin progression of the group as a whole and therefore we can manage it as a portfolio that's the advantage of having a portfolio. So I just wanted to make that point because you know, I think people are getting lost that the margins are lower in Colombia of course
This is the group until after, you know, they're, they're still about 40 percent.
Aunt, sorry, Marcia back to you and I know it's a fantastic point you know we we like investing in Colombia this point in time it's the right thing for us to do. So all these growth all this additional growth that we have, we like investing in emerging Columbia because that's what's going to give us the scale that we need in called they're going forward. Now with Salvador if you recall 3 or so many years ago, we were struggling in El Salvador so we did the right thing. We bought some Spectrum. We put money behind the
We change the management team and supported them strongly. We've increased our commercial distribution in El, Salvador as well. We've increased our focus on the consumer in El Salvador and then just start service layers in El Salvador and we have now the highest MPS with ever had in El Salvador with a strong Network and a strong commercial distribution. So no surprise. We are getting fantastic results in El Salvador. It is both execution and for
focus with Investments.
A better Care. Thank you. So our next question is going to come from Vito to meet at Goldman Sachs dito, you're on mute dito.
Dito, you're on mute.
Oops. Sorry.
Goes better than expected over the next few quarters. Thank you.
Sure. So I'll take 1 and then perhaps let him think a little bit about to conceal. If you just let me, I'll give you the very optimistic view, right? So, you know, I like my, I like our stock and I think we are outlook is improving on every silly little bit. So you need to have a balance here on that answer. So listen and what the Mala?
it's
It's a good industry structure. It's a two-player Market very well managed by the players.
That's a summary of what the my life? You think about what Amala thing called the template that perhaps we should be getting towards in many of our other, 2 player markets again? Good industry structure. Well, executed, now on the back of that, of course, there is investment in the network when it became a two-player Market. We decided to invest further. In the network, we bought some Spectrum in a very tactical Manner and again, put put money towards the
Humor. And that is what's yielding. These results that you sit today? Better Network better Distribution on a lot of focus and what the model you also see is growing and home, it kind of gets bundled up with a fantastic mobile results but we have a growing home business in Guatemala that like everywhere else in the region we think really underpins our mobile service and and on the buy box I mean a logically by bucks you've heard us. Articulate a business is doing
Well we actually have fairly bullish Outlook going forward. Our Leverage is coming down. We're putting all the money we can into the organic capex Investments. So we have room to start the buy box and you know, the more confident we grow, perhaps a more bullish will be over the you attend.
And I look, you know, the hundred million that we announced today, that that is really just taking us to May next year to the AGM. So, unlike in the past, it's really, it's just an interim step with allows us to get to the AGM next year. And, you know, I'm will take a view from there as to, as to what we do next. But, you know, I think, I think it was very important for us to restart the buyback program and
You know, I think I think as material is really sort of said it out the stock stays where it is, and I'll cash flow remains, where it's going, then obviously it will be an option for us to work hard with that. I mean, just just to, to just give you a complete view of how we do. We got, we think we got very strong financial and operational performance and our Outlook is improving. We think we got all the internal Investments fully covered. I mean, you've seen as actually
Most in the business and coptics this year we got our EBD, a growing. So we're the leveraging rapidly. So we feel is right time for us to go forward with this buyback program and the more of this good results that we see the more bullish, we're going to be with that buyback programs, that's the summary of it all.
Very clear. Thank you.
Now, we're going to go to Berkeley.
Thank you. I had 2 questions. The first 1 that we're going to Panama. I think this is the country that obviously has been hard. Hit hard by the pandemic and you flag the, in the past. That is it has a disproportionate impact. We need to be Trend. I think in your release into 2 things, remain to be challenging. So, I was wondering when you see the light out of the tunnel, so to speak in parallel.
Is it something that is chill at Pathmark?
The next few quarters, or could it be a driver for the growth? So, that's the first question, I'll go after that to pronounce this.
Because of Truth.
Yeah. So
Panama is for us, the weight of the way to say this is we're kind of on the waiting room, if you will or if you if you like horse racing were kind of on the starting stall, if you know what I mean. Just with Jitter, he's ready to just let the horse go and and what's holding it back is simply the economy kicking into high gear. If you go back numbers with
Georgios Matthew, the consumer business really has had a meaningful growth in terms of units, both on fix which we have continued to grow and on mobile, which we have continued to grow. Steadily, we showed you the numbers on the back of cross-selling. And when you look at the B2B customer numbers, we haven't really lost any market. Share, we're just there waiting for the economy to come.
Come back and and this is why I said they were. So very well positioned in Panama for when the economy comes back it was 18% decrease last year it's growing 5 to 6 percent this year but and as you know we met with the president a couple of weeks ago in the u.s. president of Panama and what we got was the sayings of the really really well positioned into the medium-term and long-term the third line of the kind of back Panama Canal is going to be built for investment.
Is coming back to Panama and there's a vicious project so I don't know exactly Matthew what is going to be next quarter or the quarter after that or whether we're going to wait a little bit longer but what I do know for sure is that Panama is ready to go back to growth and that we are the best position because we're done everything there to be ready. It's not just that we've grown our customer counts is that we modernize a network with change the brand with integrated the businesses. If you were to go to Panama today, you were
To think that people has been there for the last 30 years. That's how well we've done that integration. So again let's let the race start because we're going to we're going to go fast in Panama soon. As the economy recovers, I don't believe in particular basically points.
You know, kind of the, the full support of 2019 which was both seasonally sort of is always a stomach ulcer. So I think we've seen very, very nice recovery in Panama and you know that the K Pi server extremely strong so where we feel well set for the future.
Thank you, Christian, ocf. Obviously the H1 run rate seems to be above, you know, the Target or at least easily meet the target. I think you pointed obviously, that was a bit more backhanded capex HQ compared to H 1 but as there are there any other headwinds that we should be aware or you just as usual being cautious?
I had, you know, I mean, we, we basically, yeah. We, we said, I'll stall out this year to do, you know, big investment. And yeah, we still have. Well, it worked last year, and we are continuing to modernize networks, but 1 of the biggest drivers for is, is the is the customer update that is, that is affecting the capitalization and that's just good. Catholics far as I can see. So, yeah, we saw that that are either da is running higher. And, you know,
And therefore, we felt was real opportunity to reinvest that back into Catholics slightly higher than maybe you expected. But I think it will drive future growth.
And then lastly, maybe it's probably difficult to work to know at this point in time. How is the pandemic situation for me at least in the different countries? I was weak. There's a force wave in Europe and in the US I don't know how, how, how important that is at the moment India areas, where you operate on these to some extent you allowing for that risk in your in your outlook, for each to 2021.
Thank you for asking that Matthew because, you know, if you were to hear us just not mention covet on this call, it would get the sense that were oblivious to what's happening in the markets. And we're not, we're not, we're very bullish and and we're very optimistic because of 2 things despite what's happening in the market..1, is we demonstrated the last year our strong resilience
Cash flows are strong. Our customer pick up is strong in the middle of the pandemic. So what we think is we got the way to work through it, we gain confidence, that despite coveted, we've got the tools and the focus to manage through it. So that's where we you here is. Be so, bold is just like the fact that there is a third wave out there. In our markets, in terms of a little bit of detail, there's about 4 or 5 countries, Salvador Colombia Panama and Costa Rica that.
Reaching the 25% vaccination rates, the rest are less 5 to 10 percent, but the key to this question from a business point of view is not only how resilient the demonstrated we can be with reduced, dad with increased investment. We've got more customers in the middle of the pandemic because we know how to handle the situation. The key thing is that we don't expect that covered will drive, despite how harsh it is will drive anymore.
Strong lock lockdowns. I would see in this water. That's the key to it. It is clear that politically economically socially there won't be any more strict lockdowns in our countries simply because people want to get out and work and when they can economies to work. And that is part of why we feel bullish about how I look
Thank you very much.
So, we'll now go to a soomit datta, mistreat research?
There was an ice pick up in the first quarter. Can you give any granularity on where that is coming from and maybe some thoughts on on the kind of run rate? We could expect going forward and again maybe we're where we might be seeing some of that.
Employ market and then secondly and I guess this is probably a little bit related just on the capex increase and can you give any more granularity again in terms of where, you know, I suppose thinking how much of that is maybe Wireless how much of that is cable, huh? And much of that. Might be expanding the purple plant. How much of that is coming from more homes connected if you could try to train the
Increase a little bit more and that would be super helpful. Thank you. And then I had 1 more but maybe if we could do those first, they'll be great. Sure. So on the homes, and they're spread out between Nicaragua, Guatemala, Colombia and Lydia for the last couple of quarters, give or take going forward. We will are just our
1 million homes Target per year, 3/4 to 1 million, by the speed at which, the open fiber in Colombia becomes available to us. And I think that's an important part of the compensation. Here's the made. So we're happy with the runway that we have today. Which is call it half a million to 3 quarters of a million because we've been really, really happy with increasing the network. Penetration, it helps us with cash.
Flo, it helps us with return on invested capital and as you very well know, it helps us drive the sales forces to drive on, not only the new Green Fields but also sale on the existing homes and that's just a better use of capital but going forward we have a fair amount of open fiber environment in Colombia which we think is very very positive with at least 2 players there. So we will adjust our capital and redirect to spend building areas where open fiber is not available to us. So we'll find.
Wait to adjust a home past number. So that it's clear to you that, you know, what does that we're building. And why do that? We're having access from the open fiber providers in Columbia. So I hope that helps you a lot on the homes past and the topics before I hand it over to Tim to give you a little bit more more visibility on that. The key theme or narcotics is yes with Built Homes, and we picked up the number of homes with modernized networks last year. And this network this year, and every time we mate,
Denies or build a network. You see the pickup in Revenue, think of El Salvador, think of what's happening in Panama. So this year, part of the capex is going to continue to build the 700 megahertz in Colombia. We haven't finished that. So, we're in the process of that year, or that the most important thing is that it's very variable driven. It's largely CP is now in homes and installation in homes and all the posters were alone on mobile. And, and that's really
I on the title.
Question, we really can manage our ocf for the year because a lot of the Catholics is just variable its growth complex and over to you. Tim, if you want to add anything to submit your question, pretty much covered it. Actually, I mean, clearly the home installations causes a pickup in in overall capex. I mean, that now is running at about 30.35 % 30 to 35%
Of our overall capex. And you've seen the pick up in homes build, which kind of it's not a massive in terms of incremental capex but it adds a bit then you know we are looking at some modernization in the mobile space and I you saw the Erickson announcement a couple weeks back so they probably haven't got the numbers exactly to that time but it probably is is roughly the same.
Equal insulation, Home, build out mobile phones.
Okay, thanks. I might be just 1 final question. If that's okay, I, you may have seen or not, I know you've been super busy, but here in the UK there was another big ftth overlay announcement made with with Virgin Media and these, you know, these seem to kind of Come Along on a regular basis. Now, are you kind of cable networks overlaying ftth? I know you've probably answered this question more times than you'd like to have, but
Is there any kind of Poco edging closer to that sort of process for you guys?
Absol 2 things needed to happen for atth to precisely get to the point that you're describing..1 is the total cost of owning it going forward made it to be as good as a good hfc Network. And number 2, the the video environment needed to be 1 where you could W ecosystem where ftth could in the deliver the product and both of those things have happened.
Or as the second point because of Android in our markets. So going forward there's no doubt that our green pills will be fiber. There's no room no reason not to do fiber it's cheaper and a video clip system is good and so that's a good decision for us to be and I think we waited for the right time for all of our greenville's Green Fields, not it will be 5 or going forward and as you know is speeds, you know, markets are at a point in time where a brand-new hfc Network allows us to compete. Extremely
Jim Lee well, so with the existing Network, I don't think it's happening anytime soon.
Okay, thank you.
Thank you, thank you. Thank you for taking my questions. Nice to see you old. Well, I had a few questions. If I may first Leon home, if you could discuss a little bit around your pricing strategies, in your various whole markets, if you see any sort of positive Trends in that sense on pricing specifically, maybe an hour or maybe going forward or what
Strategies other.
And then I would like to sort of maybe put a question on spectrums, on the mobile side. You have good sort of effects from the 700 spectrums in Colombia, it's a for 4G Spectrum, would you want to go for more 700, senior other markets in order to improve you reach? Its that becomes available? Or would you want to go directly to maybe the central 5G specs and 3 and a half gigabytes in order to capture better speeds?
In cities and so on. So how do you, how do you put forward your strategies on the mobile side in terms of spectrum? Thank you for
on the home pricing.
We do cable 101 when it comes to our pricing strategies and we've been doing this now for a good number of years credit, you may have heard me say this before we try to create space for Strong. Net ads on home by basically, giving higher speeds to the upper tiers. Creating space for us to come with made or lower tiers speed to yours. That do not take away from our heart Pope. It's been
In the industry for a number of years. That's exactly what we're doing every Market to basically create tearing for speeds. That allows our our poop to be harvested positively going forward. And, and the proof of that is that are our pool in dollar terms for the region has continued to inch top just about every quarter. And, and you see that, you know, this quarter we're up 2.7 percent in dollar terms, I could be off on that number, but let me show can correct it.
It and that's simply because of this tearing strategy and the high demand that we have from home. So we are just you know, that that home business is a
Ruth driver for us and it has been for the last few years. As I said during a call with been put built a business at now, a scale 1 point 7 billion dollars, it's got a growth routing for 500,000 unit, adds on a yearly basis and with our pool that is actually growing on dollar terms just about every quarter. So it is a pretty strong business for us and 1 and I think back to some, its question earlier on
on 1 that has a ton of runway for us because there's a number of homes that have not been built that we can we will continue to build and perhaps now, with access to, to fiber in Colombia, will be able to speed up our ability to penetrate those markets. So, extremely happy with home, both on volumes and our pools and undergrowth going forward Spectrum on the last 2 to 3 years. We bought Spectrum in a number of places and everywhere we bought it and we built
Network. We've seen the success Columbia and El Salvador, all these cases, but the same in Guatemala. We've added a new career on some spectrum that we bought there and you see the results. You want them Allah as well, in Panama we're using Spectrum, AWS spectrum that we expect finally buy from the government in the next year or so. And and you see the subscriber pickups in Panama are strong and that's in the back. Also of using these. Aw
Ramona on a rental basis, if you will during the panda.
We're happy overall with our Spectrum positions. We are in no need of spectrum. Just about anywhere. You know markets we've made some Investments over the last 4 years or so that have corrected or improved our Spectrum position Columbia and it's Salvador and Panama are the most obvious ones. So we have no need for additional Spectrum at this point in time anymore. Now 5G going forward
Some countries 1 are politically run faster than others. And if those auctions do come into place, of course that were well positioned in all of the markets to be an acquirer of 5G. But from a, from from Regional point of view, 5G is just not quite ready for prime time in our markets, we think the absolute right thing to do.
For our economies is to continue to drag 4G penetration. That will have the highest impact on the well-being of our society is because it's still pretty low.
Perfect. Okay. Thank you. Could I just have a follow-up little bit of a housekeeping. Your the going or transaction? Was that closed in? Q2, did you see the dragon, a costs? Or did you have any any items in it? Is it out to the books? Or should we expect something to show up in Q3 on from the going, a transaction? But all of the kind of costs and impacts orange, YouTubers number should be silly in the first half.
Business should be no further impact schools. Perfect. Thank you.
Thanks for a drink. I believe we had 1 last question, actually, just came in from his death on billing Stefan. I don't know if you are in the queue. Okay here we go. You'll need to unmute perfect step on the floor is yours. Thank you very much. Hi everyone. Yeah, a few questions. First of all regarding the prepaid methods this quarter I know you had a really good step up
The postpaid, but given the strong growth in remittances as far as I understood in some of your markets during Q2. Are you a bit surprised that the prepaid didn't increase as much or did you deliberately, you know? Keep it down. So that's the first question. See how the question is a little bit on Opex? I'm looking at some of your markets and I see some sequential increases in costs, at least.
I think I see it in in Panama compared to q1 in El Salvador, and in Colombia, Colombia. I think you have answered already, but maybe you can say something about this. There's some special things in, in Panama, and El Salvador, and just the last thing. Where are you do you think in terms of closing Tanzania? That's it.
So, I think I've used the line on Africa, quite a bit about the movie Out of Africa, beautiful movie, but it's a long, long movie. And if you look at the edit at the end they go on for a long, long time. So Tanzania is on track. We're going through the motions of regulatory approval, talking to the government Etc, but it's a slow process as everything.
Africa. I don't know. Tim, if you have any more color than that, I'm tons of me other than just be patient.
No, no, I mean it's just going through its regulatory process, you know that the reason to model for these things they have to make it up as I go along and then on the Optics and pin you can you can add a lot of color here. The markets that you highlight stuff on are very similar to Colombia. We will perhaps just focusing it on Columbia, but the countries that you highlight with higher objects, Panama and El Salvador, just like Colombia are the countries where we're getting it?
Ton of subscribers coming in, both Panama and El Salvador. Just have had tremendous user intake. By the way, both in Mobile and in home Panama - other have had meaningful important, HomeNet ads. And it's also a market where we've modernized and increase the size of our Network. When we modernize a networking, El Salvador on in Panama. We also pick up areas of coverage, and as result of that, you see the Optics, highly correlated with our
Subscriber and revenue growth on both phones. And lastly, on prepaid, I think the key to this is, of course, we have great to poor. We had great q1, so the Slowdown is only natural. But most importantly think of all those made gains that we had on prepaid in the prior quarters as our fishing pond for postpaid, about 1/2 of the Columbia postpaid subscribers came from our own prepaid base. So
So we're basically using a prepaid net gains that we had in the prior quarters as part of our fishing pond going forward. And that's what we should be doing because then of course we know the subscribers quite well.
Good. Thank you very much, absolutely.
So that's the last question if you want to make some final remarks. No, I'm just to thank everybody for being here with us today and for paying attention, very happy with our cue to is old. So I think it shows what we can do going forward. Very happy with the direction, the business is going, we're decreasing, leverage adding subscribers Revenue growth, and it would be a growth. I've come back and just about in every metric, we are higher than wework.
Before Comet, and with this renewed confidence, we're happy to be able to restart her shoulder Administration with the buyback program that we mentioned earlier. As you can see, we're very bullish, not only on our Outlook but on our stock, so thanks everybody. And we look forward to hosting you in order from now.